On Our Radar

On Our Radar

Economy Adds 120K Jobs in March; Jobless Rate Falls

U.S. payrolls rose far less than expected in March, keeping the door open for further monetary policy support from the Federal Reserve, even as the unemployment rate fell to a three-year low of 8.2 percent.

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Employers added 120,000 jobs last month, the Labor Department said on Friday, the smallest increase since October.

Economists polled by Reuters had expected nonfarm employment to increase 203,000 and the jobless rate to hold at 8.3 percent.

The weak employment growth last month likely reflected the fading boost from unseasonably warm winter weather. The payrolls count for January and February was revised to show just 4,000 more jobs created than previously reported.

The drop in the unemployment rate, to the lowest level since January 2009, reflected a drop in the labor force. The separate household survey, from which the jobless rate is derieved also showed a drop in employment.

The weak employment gains could hurt President Barack Obama's chances for re-election in November. The unemployment rate has fallen from 9.1 percent in August.

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The painfully slow recovery in the labor market is a concern for Fed Chairman Ben Bernanke, who is keeping open the option of further monetary policy support for the economy if the unemploymnt rate remains stubbornly high.

Minutes of the Fed's March policy meeting released this week showed policymakers seeing a broadening of the economic recovery, leaving them slightly less inclined to launch a third round of bond purchases, known as quantitative easing, to spur growth.

The private sector added 121,000 new positions in March, while government employment edged down 1,000.

Construction hiring fell 7,000, the second straight monthly decline. In the huge service sector, gains were in healthcare, professional and business services categories. Temporary help fell 7,500 after rising 54,900 in February.